Five Lessons I Learned at Starbucks

November 24, 2008By Mark Tewart

I just finished speaking at a conference in San Francisco and I find myself writing this article sitting by a window next to the street in a busy Starbucks close to Union Square. It’s funny what you can learn when you take the time to really observe and listen. I would like to share the five lessons I learned at Starbucks.

Lesson #1 – Make sure you ask for the business. I have just watched a beggar collect at least $5 worth of donations in the last half hour with a sign that says – “I am saving up for a hooker, weed, wine and a steak dinner.” Not one of the people bothered to read his sign and know what they were even donating for. Not the family man with his wife and children, not the group of older people probably in their 80s, not the business man in the suit, nobody. The beggar obviously learned the power of asking, no matter what.

Lesson #2 – It’s not the money. People pile into Starbucks one after another spending three and four bucks on of a cup coffee. Obviously you can get a cup of coffee at a diner down the street for a lot less money. But yet, people willingly spend a $100 per month or more at Starbucks. Why?

People are buying the experience and the perception of the brand. I am sitting here writing this article in a busy Starbucks and people watching when I could be in the quiet and seclusion of my nice hotel room. The person in the seat next to me is listening to music on an iPod when they could obviously do it for free in the Square with a less expensive cup of coffee. The gentleman in the big living room type chair is reading a novel. People want the experience. Understand your customer and the value they want and the money will become less important. The big three U.S. auto manufacturers give huge rebates, and imports are still kicking their butts. It’s not about the money.

Lesson #3 – Change the process to win. I am watching out the window as people scurry on the streets. The whole world is moving faster today; the Internet, news, businesses and people in general are moving faster and faster.

People will willingly pay lots of money for a process that either speeds things up or slows things down. Although many people want things and processes that speed things up, just as many are fighting brain drain because of all the speed and want to slow things down. Change your process with your customers in mind, sell your unique advantage and experience to the customer and they will pay for the process.

Lesson #4 – Change the wrapping. I am staying at a smaller but kind of funky and cool hotel here in San Francisco. Because I travel so much and stay in so many look-a-like chain hotels, it’s a treat to stay somewhere unique. In the last several years there has been a big push towards dealers upgrading and improving their facilities.

Because I am in and out of so many dealerships it’s nice when you see a dealership that has tried to put a unique touch to their dealership.

Have you ever visited a McDonalds in a city with strict requirements that made McDonalds change their normal outside appearance to be in tune with the local environment and culture? Chances are it made you look twice and say “Oh that’s cool, a Non-McDonalds McDonalds.” It does not have to cost a lot of money to be unique and appealing in your environment. Although the manufacturers have their requirements and would like every dealership to be the same, manufacturers don’t sell vehicles and they don’t always understand retailing. You are a local or regional brand more than a national brand.

Lesson #5 – The money is in the niche. Watching traffic go by in San Francisco makes you understand the wide array of cultures, diversity and multitude of options people desire in their choices. I often watch in amazement as many dealers are lead by advertising agencies to spend vast sums of money trying to be everything to everyone with a generic non-benefit driven message.

I often think dealers would be better served to park their car across the street from their dealership and just watch for an hour. Next, I think dealers would be well served to drive the streets of where their customers live and just look at what they buy, what they do and who your customers really are.

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Five Lessons I Learned at Starbucks

November 24, 2008By Mark Tewart

I just finished speaking at a conference in San Francisco and I find myself writing this article sitting by a window next to the street in a busy Starbucks close to Union Square. It’s funny what you can learn when you take the time to really observe and listen. I would like to share the five lessons I learned at Starbucks.

Lesson #1 – Make sure you ask for the business. I have just watched a beggar collect at least $5 worth of donations in the last half hour with a sign that says – “I am saving up for a hooker, weed, wine and a steak dinner.” Not one of the people bothered to read his sign and know what they were even donating for. Not the family man with his wife and children, not the group of older people probably in their 80s, not the business man in the suit, nobody. The beggar obviously learned the power of asking, no matter what.

Lesson #2 – It’s not the money. People pile into Starbucks one after another spending three and four bucks on of a cup coffee. Obviously you can get a cup of coffee at a diner down the street for a lot less money. But yet, people willingly spend a $100 per month or more at Starbucks. Why?

People are buying the experience and the perception of the brand. I am sitting here writing this article in a busy Starbucks and people watching when I could be in the quiet and seclusion of my nice hotel room. The person in the seat next to me is listening to music on an iPod when they could obviously do it for free in the Square with a less expensive cup of coffee. The gentleman in the big living room type chair is reading a novel. People want the experience. Understand your customer and the value they want and the money will become less important. The big three U.S. auto manufacturers give huge rebates, and imports are still kicking their butts. It’s not about the money.

Lesson #3 – Change the process to win. I am watching out the window as people scurry on the streets. The whole world is moving faster today; the Internet, news, businesses and people in general are moving faster and faster.

People will willingly pay lots of money for a process that either speeds things up or slows things down. Although many people want things and processes that speed things up, just as many are fighting brain drain because of all the speed and want to slow things down. Change your process with your customers in mind, sell your unique advantage and experience to the customer and they will pay for the process.

Lesson #4 – Change the wrapping. I am staying at a smaller but kind of funky and cool hotel here in San Francisco. Because I travel so much and stay in so many look-a-like chain hotels, it’s a treat to stay somewhere unique. In the last several years there has been a big push towards dealers upgrading and improving their facilities.

Because I am in and out of so many dealerships it’s nice when you see a dealership that has tried to put a unique touch to their dealership.

Have you ever visited a McDonalds in a city with strict requirements that made McDonalds change their normal outside appearance to be in tune with the local environment and culture? Chances are it made you look twice and say “Oh that’s cool, a Non-McDonalds McDonalds.” It does not have to cost a lot of money to be unique and appealing in your environment. Although the manufacturers have their requirements and would like every dealership to be the same, manufacturers don’t sell vehicles and they don’t always understand retailing. You are a local or regional brand more than a national brand.

Lesson #5 – The money is in the niche. Watching traffic go by in San Francisco makes you understand the wide array of cultures, diversity and multitude of options people desire in their choices. I often watch in amazement as many dealers are lead by advertising agencies to spend vast sums of money trying to be everything to everyone with a generic non-benefit driven message.

I often think dealers would be better served to park their car across the street from their dealership and just watch for an hour. Next, I think dealers would be well served to drive the streets of where their customers live and just look at what they buy, what they do and who your customers really are.